AsianFin -- China’s Huawei Technologies reported a nearly 28% drop in net profit for 2024, as the company ramped up investment in research and development while lacking the one-time income boost from the sale of its Honor smartphone unit in previous years. Despite the profit decline, Huawei’s revenue surged 22.4% to 862.1 billion yuan ($118.9 billion)—its fastest growth rate in five years.

Huawei attributed the profit decline to heavy R&D spending, which reached 179.7 billion yuan, or approximately 20% of total revenue. The company’s spokesperson noted that the absence of income from asset sales also contributed to the earnings decline.

Huawei sold its budget smartphone brand Honor to a Shenzhen government-led consortium in 2020 after U.S. sanctions restricted its access to high-end chips and Google services. Payments from the sale had previously bolstered Huawei’s profits.

Huawei’s information and communication technology (ICT) infrastructure segment remained its largest revenue contributor, generating 369.9 billion yuan, a 4.9% year-on-year increase. Meanwhile, consumer business revenue—which includes smartphones and digital devices—jumped 38% to 339 billion yuan, marking the second-highest growth rate among its five business divisions.

The automotive solutions unit, which supports traditional carmakers in developing smart vehicles, was a standout performer, with revenue soaring more than 4.5 times to 26.4 billion yuan. The unit also turned a profit for the first time in 2024.

The latest revenue figures mark Huawei’s third consecutive year of growth since a sharp one-third revenue drop in 2021, following intensified U.S. sanctions restricting access to advanced chips. The company is now approaching its 2020 revenue peak of 891.3 billion yuan as it adapts to ongoing geopolitical and technological challenges.